Political connections of top entrepreneurs: World experience and specificity of Russia

Abstract

The study applies institutional approach to economic history. The world experience of political connections using by top entrepreneurs in different institutional environments is overviewed. Political connections are a resource that provides competitive advantages in economic markets. These connections also carry certain risks for their holders. We consider countries with developed as well as emerging markets. There are two main modes of political connections using, which are determined with the institutional parameters of political and economic systems. Top entrepreneurs receive regulatory advantages through organized lobbying of their private interests in developed countries. These advantages arise with the adoption of laws those set preferences. Lobbying is proactive, when top entrepreneurs impact policy-makers to "push" beneficial legal acts. Reactive lobbying means that top entrepreneurs act against adopted laws that worsen their competitive advantages. Relationships between top entrepreneurs and political actors are predominantly personalized in the emerging economies. As a result privileged regimes are arising. The hybrid institutional characteristics of emerging markets are manifested in the absence of functional division between market, political and administrative transactions, and the dual role of both political and economic actors. Our special research focus is on the experience of Russia regarding the use of political connections. The long stage of evolution within the Soviet type centrally controlled economy significantly influenced the nature of the relationship between economic and political actors.